30K new taxpayers cleared dues under special scheme

KATHMANDU, JAN 18 -

Despite initial lukewarm response, around 30,000 new taxpayers paid taxes under a special scheme that offered tax and fine exemptions. They contributed around Rs 400 million to the government’s revenue, according to the Inland Revenue Department (IRD).

As reports from a few Inland Revenue Offices (IROs) were yet to be received until Friday evening, IRD expected the number of new taxpayers and revenue collection would go up. Under the special scheme offered through the Financial Ordinance 2013, private institutions, small traders, cooperatives, professionals and other individuals had been asked to pay income tax for the last two years within mid-January and get exemptions on tax liabilities of previous years.

“The response was better than what we expected,” said Rammani Duwadi, deputy director general of IRD. “There had been an overwhelming response from small traders who were facing the problem of mismatch between the records with them and with the tax authority,” he said.

Duwadi said out of 4,400 mismatches found in the IRD probe, 3,700 traders paid taxes to settle the issue. Traders having annual transaction less than Rs 2 million, who do not have to register with value added tax (VAT), were offered tax exemption of earlier years, fee and interest if they paid the tax for fiscal years 2010-11 and 2011-12.

According to Duwadi, around 18,000 non-filers under income tax and 2,200 non-fliers under VAT filed their transaction details and cleared their liabilities. According to IRD, the number of taxpayers taking permanent account numbers (PAN) reached 623,439 as of the last fiscal year, while those registered under VAT reached 36,174.

Around 3,500 professionals, including doctors, lawyers, and chartered accountants, among others, participated in the scheme, according to the IRD. Around 1,300 cooperatives also came under the tax net, while 350 educational institutes paid taxes under the scheme. A total of 542 brick factories registered under the VAT, according to IRD.

The tax authority said it received very good response in the eastern Terai, besides Kathmandu. Until last week, there were very few taxpayers participating in the scheme. The number shot up after the government warned of sterner action against those failing to pay tax as per the law. The government also called a meeting of regulators, including Securities Board of Nepal and Insurance Board, to press them to make a provision that would force business es under them to clear taxes.

New taxpayers

Category    No

Income tax non-filers    18,000

VAT non-filers    2,200

Mismatch cases    3,700

Professionals     3,500

Cooperatives    1,300

Educational Institutes    350

(Source: The Kathmandu Post)